Frequently asked questions - FAQ

This section lists questions and answers addressing various information about the Barry Callebaut Group, chocolate and cocoa products, as well as related topics to our business and the industry we are in. .

Food issues

EU Directive 2000/36/EC of June 23, 2000, authorizes the addition of a maximum of 5% vegetable fat other than cocoa butter to chocolate. This EU Directive entered into force in August 2003.

With regard to this directive Barry Callebaut adopted the following policy:

We forgo the addition of vegetable fat other than cocoa butter to all products for artisanal users that we manufacture under our own brands - such as Callebaut, Cacao Barry or Carma.

The customer-specific recipes made for our industrial customers are formulated in such a way that the products satisfy their needs as well as the tastes of their consumers. Upon request we will add vegetable fat other than cocoa butter to these customer specific recipes.

Yes. Barry Callebaut was the first multinational company to be granted a Global Kosher Certificate. Products designated as kosher meet the dietary or ceremonial laws of Judaism. Many people buy kosher chocolates because of their guaranteed quality and pure ingredients.

As early as the 1970s, Callebaut started producing kosher chocolate. The expertise gathered over the years has been shared with Barry Callebaut production sites all over the world.

To qualify as organic, foodstuffs must be produced with natural methods. Natural farming relies on crop rotation and manure fertilization to maintain soil health and productive capacity. All synthetic and toxic pesticides are replaced by natural approved products.

Foodstuffs may be labeled organic if at least 95% of their ingredients have been grown organically. All cocoa, sugar and dairy components in Barry Callebaut's organic chocolate are obtained from organic farmers. The end products are even wrapped in natural materials, not synthetic ones such as PVC. An increasing number of health-conscious consumers are choosing to buy organic chocolate. Organic crops are usually less abundant than conventional ones and they require extra care in all stages of processing. That is why organic chocolate - like most other organic products - is more expensive than its conventional counterpart.

Barry Callebaut aims to ensure that, in all countries where labelling of GMO products is legally required (e.g. China, EU, Switzerland), the ingredients used in the manufacture of its products do not contain genetically modified organisms (GMO), are not produced from GMO, and do not require a GMO labeling mention in the ingredient list.

Soya lecithin is a key ingredient in Barry Callebaut products from the GMO point of view. Soya lecithin suppliers must ensure traceability and identity preservation from the soya bean to the lecithin delivered to Barry Callebaut sites in these countries.

In other countries of the world where labelling of GMO products is not required, raw materials used in the production of the Barry Callebaut products can contain genetically modified organisms or can be produced from GMO. However, on request of our customers, Barry Callebaut can provide products produced with raw materials not containing or produced from genetically modified organisms.

Procedures are developed for the control of raw materials, documentation control, traceability and labeling. This policy applies to all raw material used in the manufacture of Barry Callebaut products produced worldwide.

The Fairtrade label was introduced in the 1980s in response to coffee growing practices. The fairtrade system was set up to protect small farmer co-operatives against powerful multinationals that put severe pressure on the market to keep the price of coffee low. European consumers reasoned that by buying underpriced coffee they were shortchanging farmers in underdeveloped countries.

By the end of the 1980s the fairtrade system was extended to the cocoa trade. The names of small co-operatives that agreed to produce cocoa in an ecologically sound manner were registered. Cocoa producers and chocolate manufacturers who want to market fairtrade chocolate must buy their raw materials from registered cocoa planters at a fair price. Barry Callebaut actively supports the fairtrade initiative. We include fairtrade chocolate in our product range.

Food safety

At Barry Callebaut we systematically keep track of all incoming goods. Raw materials, semi-finished articles and end products can be traced at all times. We can guarantee top-down traceability as well as bottom-up traceability.

Top-down traceability: we can trace back all the raw materials that were used to make a given end product to their individual lot number, supplier or arrival date.

Bottom-up traceability: for each batch of raw material, we can trace all the end products that were made out of it. We can even identify the customers to whom these products were supplied.

Barry Callebaut implemented an allergen policy in 2000. This policy aims at identifying, banning where possible and labelling all allergens as defined by the Codex Alimentarius and EU allergens list, in all the ingredients and products sold worldwide. These lists also comprise intolerants like lactose and gluten.

We ensure the safety of our products in many ways. We have adopted the principles of Total Quality Management and have implemented ISO 9001 in most of our plants. We apply Good Manufacturing Practices. We have implemented the Hazard Analysis Critical Control Points (HACCP) system. We also ensure traceability of all incoming goods, raw materials, semi-finished articles and end products.

Barry Callebaut has adopted the Good Manufacturing Practices (GMPs) defined by the U.S. government in 1970. These include the Hazard Analysis Critical Control Points (HACCP) system. This system identifies and defines the risks or hazards that may occur, as well as the preventive measures that need to be taken in order to ensure food safety. We apply HACCP to all steps of our production process, from the processing of raw materials to the manufacture of the consumer product. The system applies to (micro) biological risks causing food spoilage or illness, physical risks caused by foreign matter such as glass, metal and wood or chemical risks from toxins and pesticides. We adopted a separate fourth category that addresses allergens. Allergens are substances that trigger immune system reactions in the human body.

A Critical Control Point (CCP) is a step or procedure in the production process when control and correction can be implemented. An example of a CCP is the sterilization or roasting of cocoa nibs. If this process is done correctly, most microorganisms are killed. If the temperature is too low or if the processing time is too short, too many microorganisms may remain in the product, making it unsafe for consumption. Compliance with all CCPs in a production process ensures the production of a safe product.

Examples of hygiene practices at Barry Callebaut:

Production workers and cleaners always wear clean clothes.

Hairnets must be worn when entering production areas.

Training in personal hygiene is conducted for all staff, including contractor staff.

Thorough cleaning of production areas.

Each production line is dismantled annually for thorough cleaning and preventive disinfection.

General anti-vermin treatment.

Limited number of access points to manufacturing area with compulsory disinfection of hands.

Wrist-watches, rings, earrings, necklaces and bracelets may not be worn in production areas.

No smoking allowed except in a limited number of designated areas.

Corporate responsibility

At Barry Callebaut, we are committed to maintaining or exceeding our ethical standards in every area of operations. Our Code of Conduct underscores this commitment.
Our company values – customer focus, passion, entrepreneurship, team spirit and integrity –are the foundation of our Code of Conduct. They reflect how we strive to interact with colleagues, external business partners and all our stakeholders. We believe that business should be done responsibly, and that achieving profitable growth and contributing to sustainable economic and social development go hand in hand.

We expect all employees to behave in ways that demonstrate our company values and to show social responsibility and good citizenship in business dealings. The principles and guidelines for behavior are set forth in our Code of Conduct and complemented by local laws and regulations.
We view “social responsibility” in a broad sense. We believe we have a responsibility to all our stakeholders – shareholders, customers, consumers, suppliers, employees and the communities where we operate – and an obligation to consider their respective expectations.

As a food manufacturer, Barry Callebaut has a fundamental responsibility to ensure the safety and quality of its products. We source our raw materials, goods and services from a large number of suppliers around the world. We select our supply chain partners carefully. With operations in more than 20 countries, we recognize that our businesses have an influence on the livelihoods of many people around the world. Accordingly, we take the environmental and social impact of our business operations into consideration and strive to contribute responsibly to the communities where we operate.

We pay particular attention to conditions in countries of origin and in countries that lack a welfare structure. We regard activities that help to empower cocoa farmers, for example, to be an important factor in ensuring a sustainable cocoa industry and facilitating the economic growth of origin countries.

We support and respect the principles set forth in the Universal Declaration of Human Rights. We strongly condemn slavery and abusive labor practices including any form of child slavery or practices that exploit children or expose them to harmful or hazardous conditions. We are fully committed to playing our part in industry actionstowards abolishing the worst forms of labor (please see Industry Protocol). No such practices have been reported within the Barry Callebaut Group or will be tolerated.

While it is not unusual for children in agrarian states to help their parents out on the farm, Barry Callebaut strongly condemns forced labor, child slavery and all practices that exploit children or expose them to harmful or hazardous conditions.

The problem of child labor in West Africa is a complex issue. Many children work because their survival and that of their families depend on it. Child labor is an indicator of poverty and a low level of rural development. We firmly believe that improving cocoa farmer livelihoods is imperative in the fight against poverty because poverty is the main reason why farmers resort to abusive labor practices. Barry Callebaut has thus been actively engaged in programs for a better livelihood for cocoa farmers and the elimination of abusive child labor practices in the cocoa-growing countries of West Africa for many years.

We are present in a number of cocoa growing countries. In all our sites we strictly adhere to local laws regarding minimum age and other terms of employment. The minimum age for employment at Barry Callebaut is in accordance with the ILO Convention or the age specified by local legislation if higher.

Cocoa is a typical product of the tropics: it only grows in a narrow band around the equator. About two-thirds of the more than 3.5 million metric tons of cocoa harvested every year comes from West Africa, mainly Côte d’Ivoire and Ghana.

In West Africa, 90% of cocoa is grown on about two million small family farms. Most of these farms are about 2 hectares or less in size. It is estimated that at least 16 million people in West Africa depend on cocoa as a source of income.

With a share of about 35% to the world cocoa harvest, cocoa is a significant economic factor in Côte d’Ivoire. Between 700,000 and one million farmers grow cocoa, most of whom are smallholder farmers working their own land.

How cocoa is sold by the farmers and to whom differs from country to country.

The two largest cocoa growing countries worldwide, Côte d’Ivoire and Ghana, have very different trading systems. While is it state-controlled in Ghana, it has been liberalized in Côte d’Ivoire.

In Ghana companies such as Barry Callebaut buy cocoa from one of the licensed buying companies. In Côte d’Ivoire, the supply chain is very fragmented: Farmers may sell their beans to the cooperative of which they are members or to private buying companies, known as “traitants”. The cooperatives may choose to sell their beans to local processors, such as ourselves, or in the case of large cooperatives, they may sell directly to the governmental export authorities.

Despite the complexities of the supply chain, we aim to increase the traceability of the cocoa we buy. We have redirected our sourcing strategy towards buying more cocoa directly in the countries of origin, rather than via the terminal markets, and we have considerably stepped up our direct-sourcing activities.

In Côte d’Ivoire, about 40% of cocoa we source there comes from Quality Partner Program cooperatives. Overall, 60% of the cocoa we buy in Côte d’Ivoire comes from cooperatives. This means that we can trace these volumes back to each cooperative, and through the internal control systems of the cooperative in most cases back to the farmers. This is a major achievement in a country that has 700,000 to 1 million cocoa farmers located very often in remote areas.

Barry Callebaut has been present in Côte d’Ivoire since 1964. For several decades after its independence in 1960, Côte d’Ivoire experienced political stability and economic growth. This stability was shaken in 1999 after a military coup. The outbreak of civil war in 2002 divided Côte d’Ivoire in two. A peace treaty was negotiated in 2007. The years of political tension have had a major social and economic impact, and Côte d’Ivoire is among the poorest countries in the world.

Rather than withdrawing from Côte d’Ivoire country in view of its complex situation, thereby punishing many farmers who adhere to appropriate labor practices, we decided to pursue a different avenue: We are maintaining an active presence in the region as we are convinced that the most effective way of changing the world of cocoa farmers in West Africa for the better is through a local presence and concrete programs.

Getting accurate statistics is difficult, and different sources use different numbers. What is essential is the fact that the governments of Côte d’Ivoire and Ghana have recognized the issue and have enacted “national plans” to address labor issues, to enforce existing laws and to rescue potentially exploited children.

Labor practices on cocoa farms in West Africa are a recognized issue, with too many children participating in hazardous farming tasks or working at the expense of attending school. The claims made in the media that chocolate products are made by “child slaves” are a misrepresentation of the facts and also culturally insensitive, since the vast majority of children are living with their families or relatives. In rare instances, children may work on cocoa farms having travelled away from their parents or immediate family. We believe that no child should ever be harmed in the process of growing or harvesting cocoa.

At Barry Callebaut, we strongly believe the no child should be harmed in the process of growing or harvesting cocoa and that human trafficking is totally inacceptable in any form.

Many children work because their survival and that of their families depend on it. Child labor is an indicator of poverty and a low level of rural development.

We firmly believe that improving cocoa farmer livelihoods is imperative in the fight against poverty because poverty is the main reason why farmers resort to abusive labor practices. Barry Callebaut has thus been actively engaged in programs for a better livelihood for cocoa farmers and the elimination of abusive child labor practices in the cocoa-growing countries of West Africa for many years. Another focus of our activities is to give children access to education.

Much attention is being given to the issue of labor practices on cocoa farms, and rightly so. Too many children participate in potentially hazardous farming tasks or work instead of attending school. Children have been found who were forced to work on farms. This is unacceptable in any agricultural sector, including cocoa. No child should be harmed in the process of growing or harvesting cocoa – or any other crop. Forced labor, slavery and trafficking of any person can never be condoned under any circumstances.

Accurate data about how many children are involved in hazardous activities on cocoa farms in West Africa, or who are forced to work, are difficult to obtain. The International Institute of Tropical Agriculture (IITA) made one of the first studies in 2002. In recent years the governments of both Ghana and Cote d’Ivoire have conducted surveys to assess the scope of the issue and to develop action plans to address the conditions the surveys revealed. (These reports are available on the IITA and respective government websites.) Interventions in mid-2009 by Interpol and the Ivorian police authorities demonstrate the willingness of the governments in the region to work to combat illegal trafficking of minors to work in the agricultural sector.

We believe that long-term solutions to child labor abuses will require the commitment of many people working together, including parents and communities, governments and local authorities, civil society organizations as well as industry. Claims by certain civil society organizations that “practically all” chocolate is produced from cocoa collected from farms where children are working in slavery cannot be substantiated. In our opinion, such statements do not reflect the realities of life for the estimated one to two million cocoa farmers and their families striving to earn a livelihood in West Africa under extremely challenging economic, political and social circumstances.

Cocoa farming families must earn enough to have a decent living. Child labor is an indicator of poverty and a low level of rural development.

Cocoa is a traded commodity. Cocoa prices are at record levels, and cocoa farmers in Côte d’Ivoire are benefiting from this price evolution.

However, the yield per hectare in Côte d’Ivoire has dropped from about 1,000 kilos to 500 kilos or less due to unsustainable agricultural practices, including monoculture, old trees, pests and diseases. All these factors also impact the quality of the cocoa.

The cocoa and chocolate industry will not be able to end poverty in Africa. But for nearly 10 years now, our cocoa sector has been committed to a programof investment and improvement of social conditions in cocoa producing countries. We do not claim that we can do this alone. It is for this reason that we work with Governments and the European Institutions, Donor Agencies, NGOs and all other stakeholders to make the essential difference. Collectively we have spent more than $75 million and are supporting some 40 programs throughout West Africa benefiting cocoa farming families and their communities.

For many years we have been actively engaged in programs for a better livelihood for cocoa farmers and the elimination of abusive child labor practices in the cocoa-growing countries of West Africa.

Here are some examples of our own projects:

"Quality Partner" Program in Côte d’Ivoire
We are taking direct action to help to improve cocoa farmer livelihoods through our Quality Partner Program (Partenaire de Qualité) in Côte d’Ivoire. Launched in 2005, the program offers training in good agricultural practices and post-harvest management to help enable farmers to improve the quality of their cocoa beans and to increase their yields. By delivering high-quality cocoa they can earn a better price, and by producing more cocoa they can increase their earning potential.

Biolands in Tanzania
Biolands in Tanzania, in which Barry Callebaut now has a 100% stake, was founded in 1999 in order to work with smallholder cocoa farmers to help them improve the quality and the value of their production. Biolands works directly with the more than 20,000 participating farmers to ensure fair prices are paid to the farmers and to improve the quality of cocoa and the farmers’ quality of life. This approach guarantees full traceability for every bag of cocoa sold to us, enabling consumers to know this cocoa has been produced in a sustainable and responsible manner. Biolands cocoa is certified organic by the Swiss-based Institute for Marketecology IMO, and also been certified “Social & Fair”. Meanwhile, the Biolands enterprise is one of the largest organic smallholder programs in the world. Barry Callebaut has bought all the cocoa produced by Biolands since 2000.

Bio United in Sierra Leone
In 2008/09 we supported Biolands’ efforts to replicate its farmer-centric business model in Sierra Leone, a country recovering from war. Some 40,000 farmers registered to participate in the organic program under the established business entity Bio United. They were able to increase their yield from 290 tonnes of cocoa in 2008 to 2,000 tonnes today.

We actively participate in industry initiatives and programs. As making the cocoa supply chain more sustainable and improving labor conditions is a huge and complex challenge, action needs to be taken by industry as a whole, in conjunction with the respective governments, advocacy groups and NGOs. We therefore support all major industry organizations and initiatives, such as the World Cocoa Foundation, the "Sustainable Tree Crops Program” and International Cocoa Initiative. We are also one of the donors of the 'Cocoa Livelihoods Program'. Launched in 2009, this project is jointly funded by industry and the Bill & Melinda Gates Foundation and aims at doubling the income of about 200,000 cocoa farmers in five West African countries within five years.

Child labor sensitization. An important element of the Quality Partner Program is the regular courses for farmers on abusive child labor and the importance of sending their children to school. The agreements that we sign with our partners in this project include clauses obligating the farmers not to use any abusive child labor practices. These agreements also allow us to conduct audits at any time to assess working conditions.

Supporting education. The more time children spend in school, the less time they have to work on the family farm. However, very often there is no school or no school within walking distance for children, or their parents do not have the money to pay for school materials. In the rural areas of Côte d’Ivoire only about 20-30% of children can go to school.

If children grow up untrained and uneducated, the circle of poverty will continue. Therefore, we have programs in place to support education.

Côte d’Ivoire: Together with our subsidiary SACO, the cocoa farmer union UCADA, local government officials and a number of implementing partners, we have built a secondary school in Akoupé in the Adzopé cocoa growing region in Côte d’Ivoire. The new school serves more than 400 pupils who previously had to attend classes in shifts at another school due to lack of classrooms and teachers. In addition there is solid progress executing literacy, agricultural programs for out-of school youth and sponsoring construction of canteen, infirmary and donations of books for school library and canteen equipment.

Côte d’Ivoire: As part of our Quality Partner Program, we encourage school attendance of the children by handing out school kits and organizing schools competitions in drawing, writing and sports.

Ghana: Together with our subsidiary Barry Callebaut Ghana, the Ghana Ministry of Education and implementation partner ECHOES, we are supporting five rural schools in Ghana. In meetings with the head teachers, school officials and village elders, we discussed how we could help these schools address some of their most pressing needs, including classroom and building renovations, furniture, teaching materials, books and sports equipment.

Ghana: In rural Ghana, women are primarily responsible for the daily care of their children, including food, clothing, medicine, and school costs. While primary education is free in Ghana, the cost of school uniforms and exercise books and writing materials is often difficult for families to afford, especially if they have many children. We are supporting an ECHOES scholarship program in cocoa growing areas of Ghana. The 3-year scholarship package benefits mothers and is divided into 3 parts. The first third goes immediately towards the school expenses for two children. The remaining two-thirds are given to the mother to invest in her existing business. Scholarship mothers will also receive business training to improve their entrepreneurial skills so they can afford the school costs for their children at the end of the three-year scholarship program.

The cocoa and chocolate industry will not be able to end poverty in Africa. However, for nearly a decade, leading companies in the chocolate and cocoa sector, including Barry Callebaut, have supported programs that aim at improving the social conditions of the about 2 million cocoa farmers and their families in cocoa communities in Côte d’Ivoire and Ghana. As we cannot do this alone we work with governments, donor agencies, NGOs and other stakeholders. Collectively we have spent more than USD 75 million and are supporting more than 40 programs throughout West Africa. We would like to give you an overview of the most important industry programs:

International Cocoa Initiative (ICI). Together with other cocoa and chocolate companies, NGOs and the governments of West Africa, we signed the Harkin-Engel Protocol and thereby underscored our commitment to work to eradicate the worst forms of child labor in the cocoa sector. A key partner in this effort is the International Cocoa Initiative (ICI), a foundation established by industry and civil society under the framework of the protocol. As of the end of 2011, ICI had active programmes in 290 cocoa growing communities, 133 in Côte d’Ivoire and 157 in Ghana, reaching a total population of 689,000 and had conducted child-labour awareness-building for more than 282,000 people in cocoa-growing communities. ICI has supported the construction or rehabilitation of a total of 520 classrooms to accommodate 26,000 schoolchildren, and sponsored the placement of 245 trained teachers in total, ensuring better access to quality education for more than 12,250 children. ICI has also provided 2,783 tables and benches to pupils in Côte d’Ivoire, which benefited more than 5,500 school pupils.

World Cocoa Foundation (WCF). As a member of the World Cocoa Foundation, Barry Callebaut helps fund efforts to ensure cocoa sustainability worldwide through partnership-driven programs focused on training for farmers and communities and applied scientific research. Through the WCF, Barry Callebaut also helps fund the Sustainable Tree Crops Program (STCP).

In addition to these programs, Barry Callebaut joint another major initiative in 2009:

Cocoa Livelihoods Program. Barry Callebaut has joined with the World Cocoa Foundation, other industry members and the Bill & Melinda Gates Foundation to improve the livelihoods of approximately 200,000 cocoa farming households in Côte d’Ivoire, Ghana, Nigeria, Cameroon and Liberia. The USD 40 million, five-year Cocoa Livelihoods Program, launched in February 2009, focuses on enhancing farmer knowledge and competitiveness, improving farmer productivity and quality, promoting crop diversification and improving supply chain efficiencies. On-the-ground program activities began in late 2009 and early 2010.

Within the framework of the Harkin-Engel Protocol the International Cocoa Initiative was founded. It is dedicated to combatting child and forced labour in the cocoa-growing sector of West Africa. This challenge is complex and huge and requires a long-term effort.

We would like to give you the example of an ICI project in Campement Paul in Côte d’Ivoire: Campement Paul is a community located in the San Pedro district of Cote d’Ivoire. It was the first Ivorian community to adopt an ICI-sponsored Community Action Plan to eradicate child labour from its cocoa farms.

The community identified the lack of education provision as a key constraint. As a result,they built teacher accommodations and recruited two volunteer teachers. The ICI sponsored the construction of new classrooms and 80 pupils now can attend primary school for the first time.

Today, thanks to these efforts, the number of children using machetes has dropped by 19%, the number involved directly in spraying activities (pesticides and fertilizers) by 26%, and the number carrying heavy loads by almost 34%. It is now forbidden for younger children to be present while farms are sprayed or to help on the farm during school days. Lydie, age 13, says she now fetches water for spraying the day before it begins on her family’s farm, because her mother understands how dangerous spraying can be for her.

Consumers increasingly demand assurance from food manufacturers that their products have been produced in a responsible and sustainable manner. This is why interest in certification or labelling schemes has been growing.

Some of the certification schemes and labels available for cocoa and chocolate include:

With almost 20 years of experience in certified cocoa and chocolate, Barry Callebaut began with certification programs long before present-day interest appeared and is now a leading global supplier of certified products for the food industry. Because of its extensive presence in origin countries, Barry Callebaut sources and supplies more than 100 product references of certified chocolates and cocoa powder and has projects with all of the main certification programs. These programs include developments for Fairtrade, Organic / Fairtrade, UTZ certified and Rainforest Alliance Certified™ products. Barry Callebaut further offers “Fair for Life” certified products through its subsidiary Biolands.

While there is some similarity or overlap with respect to the requirements among the certification schemes listed here, each usually has a distinct area of emphasis and primary focus. What the schemes have in common is independent, third-party validation that certain conditions, as specified by the respective scheme, are being met in the growing, production and/or manufacturing of ingredients or products, including the segregation of the ingredients or products.

With the exception of Organic, all the above-named certification schemes address child labor issues and clearly state that the child labor-related requirements must be complied with in order to get the certification. However, 100% assurance cannot be guaranteed.

As a customer-focused industrial food company supplying to branded consumer goods companies, we will seek to source the cocoa our customers want, including cocoa with a specific certification label and/or origin. Barry Callebaut is committed to ensuring the sustainability of the cocoa supply chain. We therefore welcome all activities, including the various certification schemes, that strive to contribute to cocoa sustainability and improving cocoa farmer livelihoods and ensuring that children are not harmed in cocoa farming. We have long offered Fairtrade-certified and Organic-certified cocoa and chocolate products in our product portfolio, for example.

No. While third-party certification inspectors will check if certain labor standards and working practices are being followed on select farms and report what is observed at a given time, they do not make declarations such as "child labor-free" with respect to the beans. It is virtually impossible for a third-party to provide a 100% guarantee that no child labor was used in the harvesting, fermentation or drying of a sack of cocoa beans. Further, it is important to distinguish between children helping out on the family farm, as is part of the rural agricultural tradition in cocoa producing countries, and inappropriate or dangerous work for children, work that prevents children from going to school, and any kind of forced labor or trafficking.

Furthermore, we should recognize that certified cocoa and chocolate products are a niche market making up 3-4% of global chocolate sales. Therefore, we must concentrate our efforts on making sure that the mass cocoa and chocolate market is also based on increased sustainability.

Since 1993 Barry Callebaut has offered Fair Trade certified cocoa and chocolate products. We have grown into one of the largest buyers of organic chocolate, fair trade and organic fair trade beans in the world.

We are committed to working to ensure the sustainability of the cocoa supply chain. Our business depends on cocoa. We believe we must contribute to ensuring that cocoa is grown in a sustainable way that generates income for farmers and that safeguards the environment. This is an urgent issue in many regions due to aging trees, neglected farms and poor farming practices.

On many Ivorian farms, for example, the practice of eliminating shade trees once the cocoa trees matured has led to the depletion of soils and increased vulnerability to pests and diseases. Productivity has dropped to 500 kilograms per hectare. For comparison, in other regions of the world where more sustainable farming practices are observed productivity levels of 1000 kilograms per hectare are not uncommon.

To further advance our “Quality Partner Program” with cocoa farmer cooperatives in Ivory Coast, 17 cooperatives have been selected for an ambitious 3-year sustainability project. By combining intensive training in Good Agricultural Practices (GAP) and social issues with commercial and logistical support to cooperatives and their farmer members, the program aims to empower farmers to improve their livelihoods. The goal is to help farmers to increase by 20% the productivity of their cocoa farms by achieving more cocoa per hectare, and to secure a better price for better quality cocoa that fulfils the requirements of industry standard certification schemes. As part of the project, Barry Callebaut will establish 150 farmer field schools and reach from 10,000 to 15,000 cocoa farmers. We expect to be able to buy 30,000 tonnes of certified cocoa from the participating cooperatives within three years, in response to the marked increase in demand for certified cocoa and chocolate products.

This statement provides information in response to the California Transparency in Supply Chains Act of 2010 concerning efforts to address and eliminate slave labor and human trafficking from supply chains for tangible goods.

At Barry Callebaut, we recognize that our businesses have an influence on the livelihoods of many people around the world. We believe we have a responsibility to all our stakeholders – shareholders, customers, consumers, suppliers, farmers, employees and the communities where we operate – that goes beyond making a profit. We pay particular attention to conditions in cocoa-producing countries. We regard activities that help to empower cocoa farmers, for example, to be an important factor in ensuring a sustainable cocoa industry and facilitating the economic growth of cocoa-producing countries.

We focus our corporate social responsibility (CSR) and sustainability activities on stakeholders along our value chain and on issues related to our business. Principles and guidelines for behavior for all Barry Callebaut employees including behavior related to our CSR and sustainability activities are set forth in our Barry Callebaut Code of Conduct. Our Code of Conduct is complemented by our corporate and local policies and regulations and applies to all Barry Callebaut employees worldwide.

Human rights, forced labor and child labor

Barry Callebaut observes the principles set forth in the Universal Declaration of Human Rights. We strongly condemn forced labor, slavery and all practices that exploit children or expose them to harmful or hazardous conditions. Child labor as defined by the ILO refers to work that is mentally, physically, socially or morally dangerous and harmful to children. We strictly adhere to local laws regarding minimum age and other terms of employment in our factories. The minimum age for employment at Barry Callebaut shall be in accordance with ILO Conventions or the age specified by local legislation if higher.

Sustainable and responsible farming and business practices

Barry Callebaut recognizes that farmers, particularly smallholders, in various regions of the world may face significant challenges in growing, harvesting and marketing their various crops. We strongly encourage adherence to sustainable agricultural practices. We expect fair and sound business practices to be followed by the farmers, farmer organizations, and other supplier organizations with whom we have commercial dealings.

Our focus on empowering cocoa farmers

Our business depends on cocoa, a fragile and sensitive crop grown in a narrow band around the Equator in some of the poorest countries of the world. Therefore, we actively contribute to ensuring that cocoa is grown in a sustainable and responsible way that generates income for farmers and that safeguards the environment. In addition to our own company programs, we contribute to a range of industry associations, initiatives and programs focused on sustainable cocoa production and increased income for farmers. These include the World Cocoa Foundation, the Cocoa Livelihoods Program, the Sustainable Tree Crops Program and the African Cocoa Initiative. In our Barry CallebautQuality Partner Program with cocoa farmer cooperatives, we work with cocoa farmers to improve crop yields and quality, thereby helping to increase farmer incomes and improve family livelihoods.

International Cocoa Initiative (ICI)

The International Cocoa Initiative (ICI) is a non-profit foundation established as one of the milestones of the Harkin-Engel Protocol, also known as the Cocoa Industry Protocol. As a signatory of the Harkin-Engel Protocol, we underscored our commitment as an industry member to work in partnership with governments, business and civil society towards the elimination of abusive child labor and forced adult labor in cocoa growing. Barry Callebaut is a member of the Board of ICI. Our financial contributions support the delivery of child labor sensitization programs and other education-oriented and community-based activities that are executed through local non-governmental organizations (NGOs) in Côte d’Ivoire and Ghana. These two countries in West Africa are the largest producers of cocoa beans, together supplying almost 70% of the world’s annual supply. They were the focus of the Harkin-Engel Protocol and subsequent initiatives. ICI is guided by international standards, in particular ILO Convention 182 (Worst Forms of Child Labor Convention, 1999) and 29 (Forced Labor Convention, 1930). The International Labor Organization (ILO) is an advisor to the ICI Board.

Assessing and addressing supply chain risks

With respect to cocoa, third party evaluations and assessments about child labor in the sector have been conducted through activities associated with the Harkin-Engel Protocol, including, for example, the Tulane Report commissioned by the Bureau of International Affairs, U.S. Department of Labor, and country studies conducted by ministries in the national governments of Côte d’Ivoire and Ghana. With respect to other crops that we may source for use in the production of chocolate recipes, third party evaluations and assessments are being conducted on palm oil and hazelnuts, for example.

Auditing supplier compliance with company policies and procedures

Barry Callebaut conducts periodic audits of all suppliers of non-cocoa ingredients and goods. The audits, based on ISO standards, address quality compliance and ethical compliance, and are not presently conducted by a third party. With respect to cocoa, we conduct audits of cocoa farmer cooperatives to determine their eligibility to participate in our Quality Partner Program. All participating cooperatives are required to sign a charter in which they agree to not use child labor as defined by the ILO.

Certification processes and standards

Barry Callebaut works with its customers to meet their specific cocoa and chocolate requirements. This includes sourcing quantities of raw materials including cocoa and sugar that have been independently certified by third parties as being compliant with specific certification standards. Forced child labor and forced adult labor are expressly forbidden under such standards.

Accountability standards

Our standards regarding human rights, forced labor and child labor are articulated in our Code of Conduct. Standards and procedures for reporting wrongful acts or suspected wrongful acts in violation of the Code of Conduct are communicated to all employees.

Communications and training

All Barry Callebaut employees worldwide receive a copy of the Barry Callebaut Code of Conduct in their local language. The Code of Conduct sets forth principles and guidelines for behavior and is complemented by our corporate and local policies and regulations. It is the responsibility of each employee to uphold the principles of the Code, and employees are encouraged to seek advice and to raise questions or concerns at any time with their manager, local HR department or Group Legal department. Information about our corporate social responsibility activities and sector issues and related actions are communicated regularly on the company intranet, corporate website, and internal and external publications. In addition, study tours in cocoa growing countries offer employees the opportunity to experience the cocoa sector first-hand and foster ongoing learning and understanding of sector issues, challenges and solutions.

Barry Callebaut will update this statement as necessary.

Date of last update: December 21, 2011

Jobs and training

We place great emphasis on the training and development of our employees at all levels. Training focuses on individual needs (such as job-related and specialized training) as well as on collective needs (such as leadership and time-management). We provide training modules for managers and for young high potential employees throughout the Group. These are part of a succession-planning program. We also provide technical training on specific issues to a large number of employees and intensive training for production operators.

The Barry Callebaut philosophy is to recruit young employees with great abilities and excellent education but limited work experience. During their integration process in the company, new employees are coached by experienced colleagues who accompany them through the early years of their professional lives.

Barry Callebaut has gathered a wealth of knowledge and know-how that we are proud to share with our customers at the Barry Callebaut Institutes and Chocolate Academies worldwide.

Quality and environment

We share one planet and need to make wise use of natural resources. Processing cocoa and making chocolate are energy-intensive activities, and transportation requirements are significant. As a responsible company, we want to contribute our part to reduce our impact on the environment.
Our Global Environmental Policy, launched in June 2008, focuses on managing the use of energy and reducing carbon emissions. Further, we are looking at ways to improve utilization of lighting, water and other resources at our facilities worldwide. Beyond complying with all relevant laws, rules and regulations in the countries where we operate, we continuously work to improve the energy performance in every plant. We create awareness and promote the active involvement and accountability of employees in our environmental footprint. We are investing in more energy-efficient equipment for chocolate production and, where possible, we are modifying our processes to become cleaner in energy.
In fiscal year 2008/09, we set a 5-year target to reduce our overall energy consumption in our factories and facilities by 20% per metric ton output, reduce our carbon emissions by 20% per metric ton output, and increase our use of "green" energy by 20%. We also set goals to optimize the use of raw materials to reduce waste. In fiscal year 2010/11, we initiated additional energy management activities in all regions, and we are on track to achieve the targets as planned in 2014.

Strategy and financials

Innovation and R&D is part of our success. We are also improving our market share outside Western Europe, such as in the U.S. and Asia Pacific. As a leader in the Gourmet business, we want to be the first to launch new ideas, new recipes and new products. In order to stay ahead of our competitors we are actively working with commercial marketing professionals and engineers to develop product and packaging innovations. Some examples include:

Barry Callebaut is the heart and engine of the chocolate and cocoa industry. As the chocolate and cocoa expert, Barry Callebaut is the worldwide business partner of choice for the food industry, whether it be industrial food manufacturers or artisanal and professionals users of our products. Barry Callebaut masters every step in the cocoa and chocolate value chain - from the cocoa bean to the finest chocolate, including chocolate fillings, decorations and compounds.

An in-depth description of Barry Callebaut's strategy can be found on the relevant page in the About us section.

The “combined cocoa ratio” is the combined sales price for cocoa butter and cocoa powder relative to the cocoa bean price. The formula is:

price of cocoa butter

price of cocoa powder

combined cocoa ratio

=

+

price of cocoa beans

price of cocoa beans

For cocoa processors, profitability depends on the ratio between input costs (price of cocoa beans) and output prices (price of cocoa butter and powder).

A simple example shows the interaction between the different variables: The price for cocoa beans goes up (driven by higher demand (while supply level remains constant), speculation and/or bad harvests), but the price of cocoa powder goes up less as a result of economic recession - as a consequence, the combined ratio will fall.

For about 80% of our volume, we apply a so-called “cost-plus” business model, which means that we pass on the raw material costs to our customers. Therefore, the impact of raw material price fluctuations on our profitability is limited.

At 29 Oct 2014 the share register showed 7'475 registered shareholders. The total number of shareholders probably exceeds 7'500. The following shareholders hold an interest of more than 3% of the issued share capital:

Jacobs Holding AG, Zurich, Switzerland: 50.1%

Renata Jacobs: 8.50%

As of 29 Oct 2014, Swiss investors held the major part of the stock (88%) including the Jacobs Holding, followed by British (9%), US citizens (1%) and German (1%), shareholders.

A Barry Callebaut Treasury Share is a share of Barry Callebaut AG owned by Barry Callebaut AG or its subsidiaries.

According to Swiss company law, a corporation is entitled to acquire its own shares only if its unrestricted capital surplus is at least equal to the amount of funds necessary for the acquisition and the aggregate par value of these shares does not exceed 10 percent of the capital stock.

Dividends

It is to pay an annual cash dividend that is appropriate, in due consideration of the performance and financial condition of the Group, its requirements for investment and its future prospects. It is an integral part of our commitment to manage our capital structure actively for the benefit of the Company and its shareholders.

The ex-date is the first exchange day on which the shares are traded ex-dividend, i.e. without dividend. Usually, but not necessarily, the opening price is the last closing price less the dividend amount. The ex-date will be February 26, 2015

The dividend proposed by the Board of Directors is made public with the announcement of the Full Year results. This amount is then subject to shareholder approval in the Annual General Meeting which takes place each year around December. The amount of the last payout was CHF 15.50 per share. The payout consisted of a dividend payment from reserves from capital contributions. It was paid out on March 2, 2015